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Tom Bergman, owner and operator of the Earplug Superstore, is reviewing the costs associated with the store’s best-selling hearing aid, the BZ15. The data available to Mr. Bergman concerning this device follow.

Demand = 25 units/week

Order cost = $3/order

Holding cos = $1.50/unit/year

The Earplug Superstore operates 52 weeks a year.

If Tom orders such that his annual holding cost is twice what his annual ordering cost is, how many units at a time is he ordering?

Operation Management, Management Studies

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